How to Spend Less Money: A Comprehensive Guide
[ad_1] The post How to Spend Less Money: A Comprehensive Guide appeared first on Millennial Money. Meet Li. Li works a full-time job, works two side hustles, and is dead broke. That’s because Li spends money as fast as it comes in on expensive dinners, weekend getaways, fancy clothes, and treating friends and family. There’s no easy way around it, but if you want to avoid winding up in Li’s situation and have money in your bank account, you need to get a grip on spending. Here’s how to spend less money so you can improve your personal finance situation and meet your long-term financial goals. Top ways to save money Use budgeting apps Lock your credit cards Set savings goals Utilize thrift stores Use coupons Buy in bulk from Costco Get a fixed mortgage Reduce your streaming services Stop paying for music Eat leftovers Reconsider your gym membership Sell your car Move to a tax-friendly state Buy grocery store brands Have potluck dinners Cut your cell phone bill Lower your cable bill Use the library Downsize Take staycations Couchsurf when traveling Frequent bars less Repurpose items Look for cheaper insurance Do your own home repairs Take care of yourself Take up cheap hobbies Turn off the lights Practice cost-efficient driving habits 1. Use budgeting apps It’s impossible to reduce spending if you don’t have a clear understanding of where your money goes on a monthly basis. One simple way to get a grip on your finances is by using budgeting apps to limit how much money flows out of your account into things like car insurance, student loans, and grocery shopping. Some of the best budgeting apps include You Need a Budget and Personal Capital. Of course, you can always make your own budget using a regular Excel spreadsheet or by downloading a template online. Find a strategy that works for you and stick to it, and you’ll do just fine. The biggest thing to remember when budgeting is that needs and situations change. That being the case, it’s important to recalibrate from time to time. Learn more: Why You Need a Personal Budget Is Personal Capital Safe to Use? YNAB vs. Mint Personal Capital vs Mint 2. Lock your credit cards Consumers often have multiple credit cards on hand to maximize credit and cash rewards. The problem is that the more credit cards you have, the easier it is to overspend and go beyond your limits, racking up significant credit card debt along the way. Consider locking your credit cards and only having one or two open. This way, you won’t put money on cards and wind up racking up larger balances than you can afford to pay off. Unlocking a credit card is easy; oftentimes, you can do it by calling customer service or downloading a mobile app. Disclaimer: Before locking your cards, you may want to do some research to see what impact, if any, it could have on your credit score. 3. Set savings goals It’s a good idea to sit down and set some specific savings goals. For example, you might make it a point to reach $5,000 in your bank account, and then $10,000, $20,000, and so on. By creating savings goals and setting expectations for yourself, you’ll naturally think twice before spending recklessly. For example, suppose you want to go out to dinner because you’re too lazy to cook. You may think about your savings goals, remind yourself that you’re trying to save money, and decide to cook a healthy, low-cost meal at home instead. PRO TIP: Go out and spend money on spices like garlic, chili powder, and cumin. You can learn to make restaurant-quality meals at a fraction of the price. 4. Utilize thrift stores If you’re trying to save money, it’s vital to stay away from expensive designer clothes and learn to love discount racks, secondhand clothes, and thrift stores. Shop at thrift stores when you need to load up on new shirts, and you’ll be surprised at the nice dress clothes and cool vintage items you can find. When you’re tired of your current clothes, sell them to thrift stores for money or store credit to buy new clothes. You can also pick up cheap clothes at the thrift store and sell them online to make more money as a side hustle on sites like eBay. 5. Use coupons One of the best ways to save money on food and household items is to use coupons. Chances are you get coupon books in the mail often, advertising items like dish soap, discount chicken and beef, and laundry detergent. It’s time to put these coupons to use and avoid overspending! You can also check out a site like Rakuten, where you can get cash back on everyday items. 6. Buy in bulk from Costco Another way to save money is to spend $60 on an annual Costco membership and buy items in bulk every month. You’ll save money buying items like family-sized jars of peanut butter and olives, bread and meat that you can freeze, and household snacks like mixed nuts and cookies. Buying in bulk may seem counterintuitive, but you can actually save a lot of money this way. Most people buy staples in bulk and then supplement smaller items from the grocery store throughout the month. 7. Get a fixed mortgage It’s very hard to budget and save money when your rent goes up every month and your housing expenses are unpredictable. Consider breaking the renting cycle and getting a house of your own if you can afford it. Try to get a fixed mortgage so that your “rent” stays the same price every month. Learn more: What Do You Need to Get a Mortgage? How to Shop for a Mortgage What to Know Before You Get a Mortgage 8. Reduce your streaming services If you love movies, chances are you have multiple streaming services—Hulu, Netflix, or Prime Video. You can probably cancel one or two
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